1951-11-22

NORTH ATLANTIC TREATY

[Stage Direction]
Canada's contribution to European defence
-reference to statement of minister OF national defence
Mr. George A. Drew (Leader of the Opposition):: May I inquire of the Prime Minister whether he is in a position to make any statement with regard to the subject raised yesterday having to do with the announcement of the Minister of National Defence?


Right Hon. L. S. St. Laurent (Prime Minister):: I am in a position to repeat what I said yesterday, that I did not believe that the Minister of National Defence had made any such statement. As soon as it was possible to do so the remarks of the leader of the opposition were sent to Paris by dispatch, but it so happened that the Minister of National Defence and the Secretary of State for External Affairs had already left Paris for Rome before the dispatch arrived there. The Minister of National Defence was communicated with by telephone this morning and had not yet received the dispatch but was making every possible endeavour to get it. He is to send me a dispatch from Rome just as soon as he sees the text reporting what was attributed to him.



COMMITTEES OF THE HOUSE

[Stage Direction]
industrial relations

CONCURRENCE in
first report of standing committee
Mr. A. F. Macdonald (Edmonton East)
presented the first report of the standing committee on industrial relations, and moved that the report be concurred in.
Motion agreed to.


Mr. W. G. Weir (Poriage-Neepawa) moved:: That the name of Mr. Knight be substituted for that of Mr. Knowles on the special committee on radio broadcasting.


[Stage Direction]
Motion agreed to.

[Stage Direction]
On the orders of the day:
Mr. G. A. Cruickshank (Fraser Valley):: Mr. Speaker, I should like to know-


Mr. Speaker:: Order.


George Alexander Cruickshank: I should like to know if there will be made available sufficient box cars for our prairie wheat.



PUBLIC ACCOUNTS


[Stage Direction]
On the orders of the day:
Mr. E. D. Fulton (Kamloops):: Mr. Speaker, I should like to ask the parliamentary assistant to the Minister of Finance whether it is expected that the Auditor General's report and the public accounts which he tabled about two weeks ago will be printed and available for general distribution at the time we consider the Consolidated Revenue and Audit Act amendment so that we will have the most recent report of the Auditor General before us.


Mr. James Sinclair (Parliamentary Assistant to the Minister of Finance):: Mr. Speaker, the public accounts and the Auditor General's report were tabled on October 31 as required by statute. Unfortunately the king's printer finds himself unable to turn out the report for at least another two weeks. It is the largest single item the king's printer has to deal with. When we have a fall session we always have the trouble of having to advance the date of tabling the report to October 31. The bill to which the hon. member has referred incidentally contains a provision to extend that date to December 31. The king's printer is doing the best he can to hurry this along but it might be as much as two weeks before this printing is completed.


Edmund Davie Fulton: Could we have an advance copy of the Auditor General's report?


James Sinclair: The Auditor General's report is available but it will be another two weeks before the public accounts part will be ready for general circulation.

Financial Administration


George Alexander Drew: Was not the public accounts part tabled?


James Sinclair: What was tabled in accordance with the act was the first proof with the corrections in the manuscript. The act stipulates that a copy shall be tabled, and that was done. Because of the accumulation of printing which happens when we have a fall session, and because of the limitations of the king's printer's staff, from time to time it is found impossible to turn out reports as early as might be hoped for.


George Alexander Drew: Mr. Speaker, I find it difficult to deal with this matter by way of questions, but the fact is that what was tabled was a printed book with a blue cover glued in place, with the pages duly numbered and generally in the form in which we usually receive it.


James Sinclair: If the leader of the opposition (Mr. Drew) had taken a more careful look he would have seen that throughout the book there were a great number of corrections in ink and sections and pages were numbered by hand. Another copy like that has gone off to the king's printer as the corrected proof. As far as the act is concerned, I, on behalf of the Minister of Finance, tabled a copy of the public accounts and of the Auditor General's report on October 31 as required.



BILLS OF EXCHANGE ACT


Hon. Alphonse Fournier (for the Minister of Finance) moved: the third reading of Bill No. 19, to amend the Bills of Exchange Act.
Motion agreed to and bill read the third time and passed.



FINANCIAL ADMINISTRATION


[Stage Direction]
The house resumed, from Tuesday, November 20, consideration of the motion of Mr. Abbott that the house go into committee to consider the following resolution:
That it is expedient to introduce a measure to consolidate and revise the Department of Finance and Treasury Board Act and the Consolidated Revenue and Audit Act, 1931, and certain other acts; to provide for the organization and functions of the treasury board and the Department of Finance, and the appointment and functions of the comptroller of the treasury; to regulate the collection, management and disbursement of public money, public borrowing, the management of the public debt, and the acquisition, recording and

issue of public stores; to provide for the keeping of adequate public accounts, the audit thereof, and the appointment, salary and functions of the Auditor General of Canada; to provide for the control of the financial affairs of crown corporations: to regulate the terms and conditions upon which contracts may be made on behalf of His Majesty; to provide a procedure for the write-off of debts owing to His Majesty that have become uncollectible; and to provide for the management of the consolidated revenue fund and for the making of certain payments therefrom.
Mr. J. H. Blackmore (Lethbridge):: Mr. Speaker, on Tuesday, November 20, I made some remarks concerning this resolution dealing with Canadian financial acts and agencies. Those remarks may be found recorded on pages 1218 to 1222 of Hansard of that date. They had reference to the following words in the resolution:
-to provide for the organization and functions of . . . the Department of Finance.
I pointed out that the department of finance of a modern state has three inescapable functions. The first function is the raising or providing of money and the regulating of the spending of it. The second function is providing for the adequate financing of the production of all desirable goods and services in the state. The third function is that of providing for the adequate financing of all desirable consumption in the state.
I pointed out that in providing money to meet the expenses of the state, Canada relied too much upon taxation and borrowing with a resultant excessive burden of taxation and debt which impaired the incentive to produce. I suggested that the Department of Finance by creating debt-free dollars to match any surplus goods and services in the state, and spending such dollars into circulation, would gain access to a source of revenue independent of taxation and borrowing. I pointed out that the means at present in use in Canada for financing production were insufficient for the satisfactory discharge of that function.
Coming to the function of financing consumption, I showed that the need for financing consumption was rapidly growing greater because of the development of our age of abundance through the use of machines, technological skills such as plastics, and solar energy as derived from gasoline, for example. It is commonly said and recognized that mankind has now solved the problem of production but has not solved the problem of distribution or consumption.
I pointed out that our financial measures in Canada fall far short of providing appropriately for the financing of consumption. I argued that the only means whereby a government could finance consumption on the scale necessary in our age of plenty was debt-free money. By quoting from the report of

the royal commission on banking and currency for Canada, published in 1933, I proved that in, the years 1907 to 1934, at which date the Bank of Canada Act was passed, the Department of Finance employed the device of debt-free money.
I then turned to the international scene and in effect said that our present dangerous world situation is largely the result of a failure to distribute goods adequately among nations. I maintain that, Mr. Speaker, and stand ready to maintain it before all comers. It therefore becomes quite evident that the matter of financing consumption, not only within each nation but among nations, is an exceedingly serious matter. When the nations with little goods produce more goods, then they find that they are unable generally to sell those goods to the nations that are better off because, generally speaking, those wealthier nations are nearly self-sufficient and do not desire many goods from abroad. This has brought about conditions such as we recognize today in the shortage of United States dollars. I said that I desired to point out that the problem has to be taken care of by debt-free money, or at least government-created interest-free money.
Since before world war I, I believe nearly everybody has felt there ought to be an international bank. What they have had in mind is that there should be some international authority that could create money. They have felt that if we had an international finance department that could create money through its finance minister to represent the unconsumed goods that are being produced in the world, then it would be possible to distribute the goods by granting money to the "have not" nations so they could buy goods from the "have" nations.
It is unorthodox and it is new, but it offers a possible suggestion. I submit, Mr. Speaker, there is no possible solution that has yet been offered by man other than through government-created interest-free money.
The idea of having a world minister of finance, with authority to issue debt-free world money, sounds attractive. This was the idea in the minds of men that the schemers took advantage of when they set out to popularize the international monetary fund and the international bank. The international monetary fund and the international bank were not founded upon principles which I believe the people, fundamentally and instinctively, thought they were founded upon. The result has been that those two institutions are mischievous white elephants on our hands.
Financial Administration
The proposal to have an international finance minister would not work today, because there are insuperable difficulties in the way of using that particular kind of agency. Such an agency could not work successfully until all nations would accept the validity of debt-free money, and could understand clearly the kind of circumstances that would warrant its use, and the factors that would limit its use. Moreover it would be far too easy for such an agency to come under the control of some international organization disposed to abuse the power and the functions. Furthermore there would be too little effective means by which the various nations represented by such an agency could maintain adequate control of it. Then again there would be too great a likelihood of having such an agency gain power to infringe the sovereignty of the participating nations. For all these reasons, we cannot rely upon any international department of finance to effect international distribution.
What then are we to do? There are two devices, to either or both of which we could have recourse. The first of these devices is this: Canada, as an example, could, through her own Minister of Finance, create and issue Canadian bills as she did in the case of the $50 million to provide Britain with wheat in world war I, as is set forth in the report of the royal commission on banking and currency, paragraph 47, page 22. With such debt-free dollars, Canada could purchase in Canada, from her own producers, the goods which Canada considered she was able to spare for marketing abroad. These goods Canada could then sell to any nation she chose, such as India, and accept in return that nation's I.O.U. to be redeemed in goods at some future acceptable time. In this manner Canada could build up credits abroad in every direction. This is very much the same principle as Britain used throughout the generations to build up credits abroad, some of which she invested abroad. She thereby put herself in the strong financial position in which she was before world war I.
Each nation could manage in a way similar to that which I have suggested for Canada. To facilitate such an arrangement, the participating nations could agree upon a sort of goods-exchange-clearing-agency to give each of them expert assistance, information and advice. Each nation could then expand its production to the optimum degree, certain of markets for all its production at stable prices. Each nation could then be assured that it could obtain from the world's production whatsoever of its needs were available.
94699-so

Financial Administration The whole process would be voluntary, and free from all forms of external constraint or compulsion.
The second of the devices to which the nations could resort is the pound sterling of Britain. Britain has been perfecting the pound sterling for at least one hundred and fifty years. She has all the know-how required, all the information of every kind necessary, all the skill and experience that are needed. Britain has a record of success in financial matters that is the envy of the world, and the admiration of all mankind-even those who seek her destruction. Britain has all the connections, all the establishments and facilities. Britain has proved herself to be possessed of the magnanimity and altruism to inspire the confidence requisite. Because of her geographical and historical position, and because of her economic and strategic situation, Britain would have every incentive to do the job well. Why not make Britain the goods-and-services-clearing-house for all European members of NATO, as well as for all the British empire and commonwealth of nations? If the United States desired to join the team, she would be free to do so. Each participating nation would assist Britain through a mutual aid credit advance system whereby the participating nations would guarantee Britain access to all materials essential to her economic life.
The sterling mechanism is simple, flexible, and, in Britain's hands, limitless in capacity for expansion and adaptability. Has not Britain been for generations the centre of world shipping, world banking and world insurance? As a further aid to Britain in the discharge of that responsibility that Britain would have to assume if she became such a goods-and-services-clearing-house as I have suggested, why not have the United Nations Organization commission Britain to appoint an agency to draw up a list of all goods available for export from time to time in each participating nation? It might be suggested to her that such goods be classified into three categories, namely, foodstuffs, raw materials and manufactured products.
May I urge upon the minister that he pass on to his department the suggestions appearing in my remarks. If he does so and his department accepts them and embodies them in the Canadian financial system of the future the way will be paved for Canada to plant her best foot forward on the path of progress, ready to pass from a period of confusion, frustration and well-nigh dismay into an era of peace, order, prosperity and serenity.
Motion agreed to and the house went into committee, Mr. McCulloch in the chair.
f Mr. Blackmore.]


George Alexander Drew: Just before the resolution carries, Mr. Chairman, I wish to point out that sessional paper No. 28, which was tabled and to which reference has already been made in the discussion this afternoon, is in bound form and contains all the essential material that has been presented by the Auditor General. In going carefully through this document I find that there are only a limited number of minor amendments introduced, in ink; and there would not be the slightest difficulty in preparing enough copies for distribution to the members of this bouse within a matter of a single day. I simply cannot believe that enough copies of this document are not available for the members of the house, in view of the fact that there has been a run-off. Since this is a printed document it seems most unlikely that there would be only a limited printing of it. On the other hand, if for any reason this document has been printed and bound formally with the usual blue cover-which would seem to me a rather expensive and unnecessary process- I would suggest that the appropriate steps be taken to have the amendments made in the existing plates.
Knowing of the efficiency of the department of the king's printer in handling printed material, which we see every day in the presentation of Hansard, I am not in any doubt whatever that within a few days we could have at least the printed sheets, even if they are not bound. I strongly urge that the appropriate steps be taken to have the copies of this report before the members so that while they are discussing the appropriate amendments which have been suggested by the Auditor General, amongst other things, they will actually have before them the recommendations of the Auditor General in this last copy of the public accounts for the year ended March 31, 1951.
After all, there are in this sessional paper a number of recommendations which should be before the members at the time they are discussing appropriate amendments. Everyone will recognize the fact that it is not a practical possibility for all the members who will be considering this subject constantly to review the one single document. As the parliamentary assistant to the Minister of Finance has said, a book corresponding to this-which is the sessional paper-has been sent forward to the king's printer with the amendments. I do not know how long it has been in the hands of the king's printer with those amendments, but it has been in his hands certainly before today. I am perfectly sure that, if appropriate instructions are given, these copies can be in the hands of members of that committee, at any rate, before they are called upon to dispose of this act.

I suggest that there are added reasons why steps should be taken to have this copy of the public accounts before the members of this house. In the motion now before us and now in committee there is reference to the position of the Auditor General. For that reason 1 suggest that it is appropriate that I should mention the strong reasons why every member of this house should have a copy of this report in this session. During the session we have been discussing the cost of living, inflation and related subjects. Here in this last report of the Auditor General, as of March 31 this year, is most conclusive proof of the reckless extravagance of this government which should be in the hands of every member while this special session is still in progress. Attention has been called to such unexplainable waste as the renting of property in the city of Ottawa for $70,000, for space not occupied by anyone during that time. That is only one of many examples. The report speaks of the case where contracts were let on tender, and then, by agreement with the successful tenderer, new arrangements were made without any tender for more than twice the original amount; and so it goes through this report. At a time when we are discussing the cost of government, which is a factor contributing to inflation, and while we are discussing the possibility of saving money in every way we can, these are reasons why every member should have in his hand a copy of this report. That can be done if any serious effort is made to complete it for the members who will be sitting on this committee and for the rest of the members of the house.


James Sinclair: I think I should say a few words in this respect. The Department of Finance tabled the report in accordance with the act and turned the manuscript copy over to the king's printer. I think perhaps the inquiry of the leader of the opposition as to printing could best be directed to the Secretary of State. At the same time I would point out that the king's printer has an especially heavy burden this session because of the printing of daily proceedings. I know that the committee on combines legislation, of which I am a member, has asked for and has received permission to get their proceedings printed overnight, as is our own Hansard, so that we have them the following day. In any event, I am quite sure that the Secretary of State will ask the king's printer to expedite the printing of this document.
As to how important this document is in connection with the study of the financial administration act, I would point out that the Auditor General came before the public
Financial Administration accounts committee two years ago when we made this thorough and valuable study of both the form of the public accounts and the form of the estimates. As hon. members know, the form of the estimates has since been changed because of the recommendations of that committee. In the recommendations of the public accounts committee made in the report that year were incorporated most of the suggestions of the Auditor General. The hon. member for Eglinton is listening to me; and he will recall the excellent study we made at that time. As hon. members will find, those valuable recommendations of the Auditor General have been incorporated, for the most part, into the new act. That is the reason why the Minister of Finance is anxious to have this bill referred back to the public accounts committee which made that study two years ago, and whose members already have a fairly good, practical working knowledge of the provisions of the present Consolidated Revenue and Audit Act and also of the weaknesses of that act.
The Auditor General's report is, I believe, available in separate pamphlet form. That, of course, is the part which is attached at the end of the public accounts; at least I saw a separate form which had been made available, I think, to the press gallery the day I tabled it here. But on the main public accounts, that is the statistical summary of the public accounts of Canada for the fiscal year ended last March-that is the major part of the volume that the leader of the opposition has-that is in the hands of the king's printer. I am sure that the Secretary of State has listened to the observations of the leader of the opposition and will do his best to see that a copy is made available as soon as possible.
I myself have been through the entire work of this financial administration bill and it is my opinion that the statistical information in the public accounts or the review of irregularities which the Auditor General has reported in accordance with the instructions of his position are not of great significance in the study of the new act. I think our work on that was done two years ago, and most members of the committee on public accounts at that time have a good knowledge of what the Auditor General recommended. When this bill goes to committee we of course intend to have before the committee all the public servants who are connected with this bill. The hon. member for Kamloops quite rightly described this bill as the key bill of government. It is that, because there is no more important function in responsible government than to have public control over the receipt, disbursement and audit of public

Financial Administration funds. We intend to call before that committee the Auditor General, the comptroller general, the various deputy ministers and, I suppose, the heads of some of those crown corporations who are for the first time going to be brought under direct parliamentary control. I can tell the leader of the opposition that it is a matter of real regret to our department that these public accounts of the year are not in the hands of all hon. members.
But there again, getting back to our committee of two years ago, the Auditor General himself was the one who pointed out how difficult it is, when there is a fall session, to live within the terms of the present act, which says it shall be filed by October 31, or fifteen days after the session following that. Well, when we have a spring session, starting late in January or in February, it means that the king's printer has two, or perhaps three, months more than he has at the present time for that preparation. I would point out the strain which it has placed on the staff of both the comptroller general and the Auditor General. Our fiscal year ends on March 31. The accounts are not closed until the end of the following month; therefore the staff of the comptroller general can only start their work as far as an overall review is concerned, such as is contained in the public accounts, on May 1. The Auditor General's work, of course, comes after that. The staffs of both the comptroller general and the Auditor General are under great pressure to produce this report on the date set out in the present act. That is why in this new legislation we have the change recommended by the Auditor General to say that it shall be December 31, and not October 31, that such a report shall be tabled.
I can assure the hon. member that it will certainly be in the hands of hon. members by December 31. I know the Secretary of State is listening to this debate and I am sure he will take steps to advise the king's printer it is desirable that this report be in the hands of hon. members as soon as possible.


George Alexander Drew: I realize the immense amount of work that is involved in the preparation of this report, and I recognize also the very great importance of complete accuracy in the subsequent amendments made. I was interested in the statement of the parliamentary assistant that there is in pamphlet form the information contained in the separate report at the end by the Auditor General. If these are available I would strongly urge the Secretary of State to have them distributed


immediately, because I understand hon. members have not received the separate pamphlet. I fully recognize that there will not be an opportunity for the committee which will be considering this bill to consider the items of the accounts in detail, but what 1 have in mind are the separate recommendations by the Auditor General which the parliamentary assistant has said are in pamphlet form. They would be very helpful as showing any amendments which may be made in this extremely important measure to strengthen and carry out the recommendations that have been made, and which in this case will perhaps be the most recent recommendations that have been made. It would be helpful if they were available to this house at the time this particular bill is under consideration. I leave it on that basis, but I do feel that no matter how long it may take to complete the printing and binding of this full record of the public accounts and the recommendations of the Auditor General, the recommendations of the Auditor General in pamphlet form, which it has been said are now available, should be distributed to hon. members just as soon as possible.


James Sinclair: I did not say that they were available. It is my recollection that on the evening I tabled this report the gentlemen of the press did not all use this one copy to make their statements.


George Alexander Drew: That is not only my impression, but my knowledge.


James Sinclair: That is my impression, and certainly we should be able to turn out fairly quickly just a separate copy of the Auditor General's report. It is really not the responsibility of the Department of Finance. The Auditor General, after all, is a servant of parliament, not of the Department of Finance. I hope it will be possible to have that circulated amongst the members of the committee as quickly as possible.


Mr. Hansell:: I notice in the resolution that the bill will provide for the appointment, salary and functions of the Auditor General. Is it contemplated that his functions will change from what they are now?


James Sinclair: The bill which was given
first reading last session to enable it to be in the hands of members of parliament, and the bill which we shall give first reading after this resolution is accepted, are almost identical, with the exception 'of a few changes in phraseology which I shall mention on

second reading. The principal change in the duties of the Auditor General is to remove from him the present regulations which under some circumstances require him to make a pre-audit of funds. Before the public accounts committee the Auditor General said it was neither reasonable nor fair to expect him to make a pre-audit before expenditure, and as Auditor General afterwards certify to the accuracy of the expenditures. I think that is the principal change in the function of the Auditor General. In other words, the Auditor General is completely removed from any departmental responsibility now. He is parliament's servant to audit the public accounts once they are through the Department of Finance; that is, through our auditor, the comptroller general.


Ernest George Hansell: It will not affect his freedom in any way? I notice in the public accounts recommendations have been made that I believe have been sound. Nevertheless, there is running through his recommendations the attitude that he is pretty well free to speak his mind, which I think is an important thing. That will not be affected at all by this?


James Sinclair: This bill gives the Auditor
General greater freedom than he has had before. The Auditor General is the servant of parliament, appointed on joint address of both houses, and is only removable by a joint address of both houses. The Auditor General is the one who I think is most pleased with the clearer definition of his duties which is contained in the new bill.


Ernest George Hansell: One other matter; the resolution also calls for the regulation of the terms and conditions upon which contracts may be made on behalf of His Majesty. Would the parliamentary assistant mind informing the committee just what relationship there is between the Department of Finance and the Department of Defence Production, public works or any other department that lets contracts? Evidently these departments are not permitted to let a contract without the Department of Finance having something to say about it. When the parliamentary assistant answers me, he might also give the committee some information as to where the Department 'of Finance may come in in advising whether or not contracts should be let on a straight tender basis, or on a cost-plus basis.
Financial Administration


James Sinclair: Once again, Mr. Chairman,
I do not like to get into the actual details of the legislation when, as far as this resolution is concerned, we have yet no final knowledge of the legislation. I think it was before the public accounts committee last year that the Auditor General gave his opinions on the various types of contracts which are let under varying circumstances: contracts by open tender to the lowest bidder, contracts on a management fee and the cost-plus contract. The relationship of the Department of Finance to other departments is specified very clearly in this bill. As the hon. member for Kamloops said, this is the key bill of government and of those other departments of government. What this bill is attempting to set up is a uniform practice in every department on the matter of letting contracts. I would not like to go into it very much more deeply at the moment, except to say that once again the bill is trying to translate into legislative form the recommendations made by the Auditor General in various appearances before the public accounts committee.


Mr. Knowles:: Will the parliamentary
assistant say a word about the provisions of this bill respecting the idea of revolving funds for stores? In particular I should like to know whether the proposal that is planned for stores accounting is the same as is now in effect in the Department of Transport. My other question is this: Will the passing of this bill automatically set up such stores accounts in other departments? Or will there be required other legislation or other enactments for each individual department wishing to have it done that way?


James Sinclair: So far as the first question is concerned, in his preliminary statement the minister said that provision for the revolving fund, so far as stores are concerned, will be modelled closely on the Department of Transport Stores Act which was debated at length a year ago. Again the aim is to have a more uniform system both of accounting and purchasing, and the benefit of bulk purchases for all departments, instead of having each department make its own.
I must confess that at the present time the answer to the second question slips my memory. However, I shall have an answer on second reading of the bill.


Mr. Wright:: I notice that in the schedule to the bill there are listed some thirty-three boards and corporations, but the Canadian wheat board is not included. I am wondering
1258	HOUSE OF COMMONS
Financial Administration if it was missed, or if it should be there. If it was left out purposely, then why was that done? Are there any other such corporations or agencies of government which are not listed in the schedule?


James Sinclair: I must confess, again, that without documentation my memory is not too good. I do recall a discussion concerning the wheat board and it is true that it is not listed. My recollection is that it is not a government agency, department or proprietary corporation within the terms of the bill.
There are however two crown corporations which definitely are agencies of government, or owned by the people, and which are not specifically listed in the bill. The Canadian National Railways, as such, is one-although it is covered by inclusion of the Canadian National (West Indies) Steamships, as well as the national railways as defined in the Canadian National-Canadian Pacific Act, and the Trans-Canada Air Lines. Another crown corporation which is not included in the schedule is the Bank of Canada. The reason could best be expressed by the deputy minister of finance and the governor of the Bank of Canada before the public accounts committee.
There is a difference between the central bank of a country and any other crown corporation. Normally one would expect all crown concerns to appear as corporations in the schedule to the bill. However on second reading full reasons will be given as to why the wheat board is not included.


Stanley Howard Knowles: Once again I should like to say a few words concerning the possibility of the government's inaugurating a suggestion system among civil servants and government employees generally. Last June the parliamentary assistant was able to inform me, to his satisfaction and mine, that the bill will contain a section making possible such a suggestion system.
1 hold in my hand a copy of Bill 401 of the last session of parliament, which was not proceeded with. My understanding is that the bill to be based on this resolution will be similar to the one which was given first reading on June 25, 1951. Section 7 (d) states:
The treasury board may make regulations . . .
(d) notwithstanding the Civil Service Act,
(i) authorizing the payment to persons in the public service of compensation or other rewards for inventions or practical suggestions for improvements.

I was glad to learn that that section was in the bill as it was presented last session.
I take it it is in the bill to be based upon this resolution-and I notice that the parliamentary assistant nods affirmatively.
When I raised this matter at the last session I indicated that this is a practice which has been in vogue in the United States for a number of years. When I spoke last June I placed on record one or two figures indicating its usefulness. I should like now to bring those figures up to date, and to say a further word about the practice as it is carried on in the country to the south of us.
At the outset let me say that I have before me a copy of the statute under which this system is operated in the United States. It is public law 600 of August 2, 1946, 79tli congress, second session. Section 14 of that law reads as follows:
The head of each department is authorized, under such rules and regulations as the president may prescribe, to pay cash awards to civilian officers and employees (or to their estates) who make meritorious suggestions which will result in improvement or economy in the operations of his department and which have been adopted for use and to incur necessary expenses for the honorary recognition of exceptional or meritorious services.
The section goes on to indicate a certain proviso, which I think I need not read at this time.
I have, too, a copy of executive order 9817, issued by the president on December 31, 1946, by virtue of and pursuant to the authority invested in him by the law from which I have just quoted. This executive order which, as I say, is over the signature of Harry Truman, and is dated at the White House, December 31, 1946, reads in part as follows:
Section 1. Any civilian officer or employee of a department (as the word "department" is defined in section 18 of the said act of August 2, 1946) who makes a suggestion, in such form and manner as his department shall require, which is adopted for use in the. department on or after August 2, 1946, and, in- the judgment of the department head or other duly authorized authority in the department, has resulted or will result in improvement or economy in the operations of the department by way of monetary savings, increased efficiency, conservation of property, improved employee-working conditions, better service to the public, or otherwise, shall be eligible for consideration for a cash award.
I should like to take a moment just to emphasize the various objectives spelled out in that sentence. They are the aims, as it were, of the legislation and the executive order. I would refer to them again: "Monetary savings"-that is certainly something

good; "increased efficiency", which is likewise desirable; and then, "conservation of property", and finally "improved employeeworking conditions, better service to the public." All would agree that these were desirable objectives when they were set out in the legislation in the United States. Furthermore, since there is now the possibility, under this resolution and the bill to be based thereon, that a similar system might be introduced in Canada, I should think hon.' members would be interested in knowing what the results of this system have been in the United States.
Before turning to that, however, I may say that this executive order 9817, which I hold in my hand, goes on to spell out the precise formula as to the amount of the cash award to be paid. In all cases the amount of the award is determined by the monetary savings to the public treasury. For example, if it is a saving between $1 and $1,000 the award is $10 for each $200 of savings, with a minimum of $10 for any adopted suggestion. Then, without reading them all, but going down to larger amounts, I may say that in the event of a saving of from $10,000 to $100,000 the award is $275 for the first $10,000 of savings and $50 for each additional $10,000 of savings.
Another section in this executive order reads as follows:
Whenever the head of a department believes that a suggestion he has adopted would benefit the government service generally, he may report it to the director of the bureau of the budget for dissemination to all departments.
Therefore I suggest that on paper this looks pretty good. It does appear as though the authorities at Washington have taken seriously the idea of soliciting from their employees suggestions as to ways in which money might be saved, efficiency improved and working conditions generally made better. The question arises: What has been the result of such a system? I have in my hand a letter addressed to me under date of October 12, 1951, by Charles F. Parker of the bureau of the budget, executive office of the president, Washington, D.C. I need not read the letter except to say that it indicates he was sending me certain information and documents, including tables, showing the results of this system as it has been in effect in the United States down to and including the fiscal year 1950. At the end of his letter he says:
I do not yet have the total results for the fiscal year 1951, ending June 30, 1951, but the reports I have received to date indicate improved results. I will forward a copy of the 1951 summary as soon as it is available.
Financial Administration
I have already said that Mr. Parker was good enough to send me certain tables, and I have no doubt that the officials of the Department of Finance also have copies of them. One of them is headed, "Agency Employee Suggestion Systems, Fiscal Year 1950". It is an excellent summary of the working of this plan. All the regular departments of the federal government at Washington are listed in the table and then there are many columns with respect to the various suggestions. Picking out two or three of the significant figures, I find, that in the United States fiscal year 1950 there were 87,582 suggestions received. Of those, 23,159 suggestions were adopted. That in itself sounds pretty good. It would suggest that the employees are taking the plan seriously, that they are submitting suggestions worth consideration, and that the government is considering all those that have merit.
The number of cash awards for suggestions amounted to 19,973, and the amount of the cash awards for these suggestions paid to civil servants was $573,865.90. Now comes the really significant figure. In return for those awards of the figure I have just named the estimated savings to the federal government in the fiscal year 1950 amounted to $20,652,988.76. Twenty million dollars may not be a huge sum of money in relation to the United States budget; it is a little more to us. But even if one omits comparisons, the plain fact of the matter is it is a sizeable sum of money, and if we could save a sum of that kind it would be well worth it, and the government ought to do it.
I go further and suggest that in addition to the actual dollars and cents that can be saved by such a plan it is bound to have a good effect on the morale of government employees. If employees in the civil service and the government generally know that the government really wants suggestions and that it will put meritorious ones into effect, it cannot but have a worth-while effect on the morale of the employees, the efficiency of government service and the respect, shall I say, of the public for what the government is doing.
It is interesting to me to note the departments of the United States government in which the major savings were effected. From looking at them I imagine that they run more or less proportionately to the amount of money being spent by the various departments. At any rate the departments at the top of the list in the amount of money saved are the three defence services. After you

Financial Administration move out of those brackets the next largest saving was made in the veterans administration department at Washington. The next three are the treasury department, which corresponds to our Department of Finance, the department of commerce, which I imagine would correspond roughly to our Department of Trade and Commerce and then the department of agriculture.
The amounts saved in the last three departments that I have named for the fiscal year 1950 were $252,698 in the treasury department, $230,030 in the department of commerce, and $222,090 in the department of agriculture. There again these are not sums that are going to wipe out the national debt but they are amounts of money that are certainly worth saving. If we could effect savings of that kind in our administration I am sure it would be worth while not only from the dollars and cents point of view but from the standpoint of morale and democracy generally.
In addition to this exhaustive table for the fiscal year 1950 Mr. Parker of the bureau of the budget at Washington also sent me another table which is headed, "Summary of Suggestion Program Results". This one separates the defence department from other government departments, then groups the two together and sets out the results across the years that this system has been in effect. In other words, it covers the United States fiscal years 1947, 1948, 1949 and 1950.
Again I will not take time to read very many figures, but I think it is interesting to note the total savings resulting from this plan in each of the four years covered by the table. For 1947 the total saving was $16,739,878. For 1948 the figure was $15,781,663. For 1949 the figure was $18,422,948; and for 1950 the figure is the one I have already given from the other table, $20,652,989. One other point that hon. members have to bear in mind when they look at these figures is that these savings are cumulative. When one gives the savings for the year 1950 what one has there is the new savings resulting from suggestions made by employees and for which awards have been paid during that fiscal year. When one takes into consideration the fact that the savings already effected in previous years have been maintained across the years-


James Sinclair: Not necessarily.


Stanley Howard Knowles: -one can see that in the course of time this can be a most beneficial system.


James Sinclair: Will the hon. member permit one interruption?


Stanley Howard Knowles: Yes.


James Sinclair: The saving need not be cumulative. It can be a saving in one individual expenditure made only in one year.


Stanley Howard Knowles: I believe that is'correct. It need not be cumulative but more likely it is because the saving usually results from a suggestion as to some different way of handling a governmental operation, and most governmental operations go on and on. As I say, I am very glad to note that the bill will provide for such a system being put into operation by our government. From a reading of the United States legislation I note that it seems to be in more compulsory terms whereas here it is in permissive language. That may be due merely to the different way in which our legislation is set up. We often get into little arguments here as to whether "may" means may or shall, but I certainly hope in this instance the fact that this section is in the bill means that it is the government's intention to go ahead with a system of this kind.
I have taken time to indicate the details of this plan because I strongly support the measure and dare to hope that by having given this account of what has been going on in the United States I have encouraged the government to inaugurate such a system as soon as it possibly can.
There is one suggestion I would make before concluding. I have these two tables. I want to state frankly that I am not asking that they be placed on the record. However, it might occur to some hon. members that it would be a good idea to have this information available if hon. members so desire and I shall be pleased to have these tables placed on the record.


Some hon. Members:: Agreed.


Stanley Howard Knowles: I repeat that these tables are from Washington. They record the experience of the United States government and they are as follows:
[Mr. Knowles.l



JM699-81 AGENCY EMPLOYEE SUGGESTION SYSTEMS FISCAL YEAR 1950

[Stage Direction]
Agriculture Department	
Bureau of the Budget	
Central Intelligence Agency	
Civil Aeronautics Board	
Civil Service Commission	
Commerce Department (except Maritime)	
Maritime Administration	
Defense Department-
Air Force	
Army	
Navy	
Export-Import Bank	
Federal Communications Commission	
Federal Med. and Concil. Service	
Federal Power Commission	
Federal Security Agency	
General Accounting Office	
General Services Administration	
Public Buildings Service	
Government Printing Office	
Housing and Home Finance Agency	
Interior Department	
Interstate Commerce Commission	
Justice Department	
Labour Department	
National Gallery of Art	
National Labor Relations Board	
Panama Canal and Railroad	
Post Office Department	
Securities and Exchange Commission	
Smithsonian Institution	
State Department	
International Boundary and Water Commission
Tax Court of the United States	
Tennessee Valley Authority	
Treasury Department	
Veterans Administration	
Totals	
Suggestion System Establishec	Number of Employees Covered	Number of Suggestions Received	Number of Suggestions Adopted	Number of Cash Awards for Suggestions	Amount of Cash Awards for Suggestions	Number of Salary Awards for Suggestions*	Amount of Salary Awards for Suggestions	Esti mated Savings	Number of Suggestions per 1,000 Employees	Percent of Suggestions Adopted$ cts.	$ cts.	$ cts.	11/ 7/47	68,649	2,687	" 728	161	7,090 00	19	1,328 00	222,090 00	39-1	27*12/ 5/47	519	3	2	2	43 24	0	0	864 76	5-8	66-73/30/48	(Withheld)	32	2	1	64 40	0	0	1,571 60	6-36/10/47	623	0	0	0	0	0	0	0	0	4/15/48	3,487	240	65	20	572 50	0	0	13,837 28	68-8	27-18/ 1/47	41,187	2,413	142	128	3,178 00	4	500 40	38,486 93	58-6	5-95/ 2/44	4,458	23	5	4	45 00	1	200 00	230,030 00	5-2	21-70/43	154,453	13,345	3,366	3,366	131,647 36	7	730 48	5,336,458 72	86-4	25-29/43	303.599	18,970	3,928	3.928	104,184 85	7,135,452 16	62-5	8/19	291.094	32.584	11,608	10,161	266,926 00	6,586 416 00	1/10/47	128	0	0	0	0	0	0	0	0	010/48	1,286	9	3	3	85 00	1	125 00	867 00	7 0	33-34/13/50	330	0	0	0	0	0	0	0	0	011/47	737	9	1	1	35 00	0	0	700 00	12-2	1M5/20/47	34,736	1,745	197	95	3,165 00	13	1,440 64	79,012 98	50*2	11-33/18/47	7,805	155	16	16	1,090 00	0	0	67,741 00	19-9	10-33/47	15.666	25	6	6	120 00	1	125 00	4.330 00	1-6	24-010,264	90	2	2	9/18/47	7,115	173	63	12	360 00	0	0	9,767 66	24-3	36-43/ 9/50	13,481	267	8	5	40 00	2	205 00	365 00	19-8	3011/43	56,566	1,110	148	125	5,565 00	129,351 60	3/17/47	2,089	13	0	0	0	0	0	0	6-2	07/29/48	26.402	827	265	11	675 00	2	205 00	22.002 35	31-3	3201/14/47	6.081	72	4	4	230 00	0	0	11-8	5-67/ 1/47	322	10	4	2	20 00	0	0	0	31*1	40-06/14/50	1,297	0	0	0	0	0	0	0	0	07/ 3/47	19.026	69	9	4	100 00	0	0	1,350 00	3-6	1304/14/43	497,126	2,017	71	6	610 00	0	0	16,235 00	4-1	3-54/11/49	998	29	5	2	110 00	0	0	3,037 00	29-1	17-28/20/48	534	7	0	0	0	0	0	0	131	07/ 1/48	24,727	1,352	83	83	2,692 11	0	0	42,871 72	54-7	615	1	1	10 00	0	3/28/50	121	0	0	0	0	0	0	0	0	07/42	13,923	606	417	Does not gi	43-5	68-88/ 2/47	89.253	3,372	915	960t	20,160 00	5	765 04	252,698 00	37-8	27-19/47	188,392	5,323	1,095	864	24,997 44	15	1,673 68	456,537 70	28*3	20-687,582	23,159	19,973	573,865 90	70	7,289 24	20,652,988 76	Average	46-4	26-4
<
[Stage Direction]
s
w
[Stage Direction]
*
N>
(O
Awards for the initiation of an idea, method, or device which increases efficiency or brings about substantial economies in the public service, not necessarily formally submitted as a suggestion. In many cases resulting economies are not included in total estimated savings from suggestions.
t Includes some awards given in fiscal year 1951 for suggestions adopted in fiscal year 1949.	to
o>
Financial Administration

[Stage Direction]
Department of Defence	Other Government Agencies	Government-Wide Total	Fiscal Year 1947	Fiscal Year 1948	Fiscal Year 1949	Fiscal Year 1950	Fiscal Year 1947	Fiscal Year 1948	Fiscal Year 1949	Fiscal Year 1950	Fiscal Year 1947	Fiscal Year 1948	Fiscal Year 1949	Fiscal Year 19503	3	3	3	13	24	27	30	16	27	30	33740,000	627,387	712,059	749,746	660,000	1,108,145	1,129,010	1,137,328	1,400,000	1,735,532	1,841,069	1,887,07451,002	58,665	72,116	64,899	5,727	24,850	24,562	22,683	56,729	83,515	96,678	87,58211,764	14,111	18,928	18,902	1,300	2,068	3,869	4,257	13,064	16,169	22,797	23,15911,222	12,942	17,491	17,455	222	919	2,546	2,518	11,444	13,861	20,037	19,973S 416,479	$ 416,109	$ 508,963	$ 502,758	$ 11,696	$ 32,188	$ 66,944	$ 71,108	S 428,175	$ 448,296	$ 575,907	$ 573,866$16,140,547	$14,418,111	$16,011,672	$19,058,327	$ 599,331	$ 1,363,552	$ 2,411,312	$ 1,594,662	$16,739,878	$15,781,663	$18,422,948	$ 20,652 98968-9	93-5	101-3	86-6	8-7	22-4	21-8	19-9	40-5	48-1	52-5	46-4231-%	24-1%	26-3%	29-1%	22-7%	8-3%	15-8%	18-8%	23-0%	19-4%	23-6%	26-4%$ 37-11	$ 32-15	$ 29-10	$ 28-80	$ 52-68	$ 35-03	$ 26-29	$ 28-24	$ 37-41	$ 32-44	$ 28-74	$ 28-73$ 1,438	$ 1,114	$ 915	$ 1,092	$ 2,700	$ 1,484	$ 947	$ 633	$ 1,463	$ 1,139	$ 919	$ 1,0342-6%	2-9%	3-2%	2-6%	2-0%	2-4%	2-8%	4-5%	2-6%	2-8%	3-1%	2-8%Number of Agencies Having Programs	Number of Employees Covered... Number of Suggestions Submitted Number of Suggestions Adopted.. Number of Cash Awards Made... Amount of Cash Awards Made*... Estimate of Annual Savings	Number of Suggestions per 1000 Employees	
Percent of Suggestions Adopted... Average Amount of Cash Award.. Average Annual Saving Per Award
Awards..
[Stage Direction]


in
n
o
o
o
s
o
a
w
[Stage Direction]
Financial Administration
James Sinclair: I think the committee is
indebted to the hon. member for the research he has carried out in this matter. His argument is similar to that which resulted in the inclusion of section 7 in last year's bill, which has been renewed in this year's bill. When the secretary of the treasury board is before the public accounts committee he will be able to outline a little more fully the meaning of section 7.
While I am on my feet I should like to answer the question asked earlier with regard to the wheat board. The wheat board is not included because it is regarded as an agency of the farmer, and not an agency of government.


Percy Ellis Wright: Does that mean that the wheat board is not a charge on the treasury of Canada?


James Sinclair: I am not in a position to
answer that question. I shall have it answered for the hon. member on second reading.


Percy Ellis Wright: If it were, it should be included in the bill or at least in the schedule.


James Sinclair: That would not necessarily follow. There are subsidized steamship lines on the west coast which are a charge on the government of Canada, but their operations would not come within the scope of this bill.


Percy Ellis Wright: They would not be set up
under an act of this parliament. The wheat board is the result of an act passed by this parliament, enforceable by parliament.


James Sinclair: I shall have a more complete answer when we are on second reading. The revolving fund will require the authority of parliament, and in addition there will be an initial item in the estimates of each department to show that there is a revolving fund. That was provided for in the draft bill which hon. members received last summer, and it will be repeated in the bill to follow.


Stanley Howard Knowles: Will it be one item for all time, or will there be an item each year?


James Sinclair: The revolving fund will be set up and then replenished by the amount authorized by parliament in the first item.
Resolution reported, read1 the second time and concurred in.
Mr. Marlin (for Mr. Abboii) thereupon moved for leave to introduce Bill No. 25, to provide for the financial administration of the government of Canada, the audit of the public accounts and the financial control of crown corporations.
94699-81J
Canada-United Kingdom Financial Agreement
Motion agreed to and bill read the first time.



CANADA-UNITED KINGDOM FINANCIAL AGREEMENT APPROVAL OF AGREEMENT RESPECTING INTEREST-FREE PROVISION OF LOAN

[Stage Direction]
The house resumed from Thursday,. November 8, consideration of the motion of the Minister of Finance for the second reading of Bill No. 10, to approve the financial agreement between Canada and the United Kingdom, signed on the 29th day of June, 1951.
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Dion, in the chair.
On section 1-Short title.
Percy Ellis Wright: 
James Sinclair: The situation with regard to this loan, Mr. Chairman, I am afraid is not quite as the hon. member thinks. Very briefly the story of this loan dates back to the early days of the war, when Britain ran up an account of roughly $1 billion for Canadian purchases for which she had no dollars. An agreement was reached for liquidation of the holdings of the British government of Dominion of Canada bonds and Canadian National Railway bonds guaranteed by the Dominion of Canada; in other words, federal bonds. The British government paid In $300 million on that, and then we gave them a dollar loan to the extent of $700 million, or in other words financed the rest of it at no interest.
The original contract was that this would be payable on demand at the end of the war. If it were not paid then, it was to carry 2 per cent interest until paid. Just to fill in with the other transactions at that time, at the same time we concluded that agreement in 1942 we gave them a gift of $1 billion to finance their expenditures in Canada for food, aircraft and things like that over the next period. That ran out about Christmas of that year, and in January of the following year, 1943, we began mutual aid which ran until the end of the war.
At the end of the war this particular loan became due. The British, of course, were not in a position to meet it, so the loan was extended for a further five years, again at no interest. The understanding, however, was


Percy Ellis Wright: I thank the parliamentary assistant for his reply. What I was suggesting was that where these funds are accumulated in Britain by the sale of Canadian securities, they be made available to the type of people he has been speaking about, the middle-class people with small businesses who might be interested in coming to Canada. It is a suggestion which I think could be given consideration.


James Sinclair: To carry out the hon. member's suggestion it would have to meet with the approval of the British treasury, because they are naturally anxious to conserve their dollar reserves, and of our own treasury. But I would not think there would be nearly as much difficulty with our own treasury as with the British treasury over this. The British have a very serious problem in connection with their exchange position.


Mr. Quelch:: Can the minister say what is the actual amount of those loans outstanding, to date?


James Sinclair: The amount is $229 million. If hon, members would like to see the rate of repayment I can either read out the figures or put them on Hansard. It is not hard to read: 1943-44, $42-4 million; 1944-45, $55-1 million; 1945-46, $64 million; 1946-47, $95-8 million; 1947-48, $111-3 million; 1948-49, $29-5 million; 1949-50, $9-9 million; 1950-51, $40-6 million; 1951 to October 25, when our last figures were compiled, $21 -6 million; that is a total of $470-2 million, leaving outstanding $229-8 million.


Victor Quelch: Those are all through the sale of securities?
1266	HOUSE OF COMMONS
Canada-United, Kingdom Financial Agreement


James Sinclair: Through the sale of Canadian securities of various types held in Great Britain. The realization comes in two forms, either when the security matures and the value is met automatically by the Canadian source, or when the Briton holding these securities attempts to sell them outside Britain. There is quite a market for Canadian securities in Britain amongst Britons paying sterling back and forth for them. I believe they sell at quite a premium. But if a Briton wants to sell a Canadian security outside of Britain he has to secure approval of the British foreign exchange control board. I believe they insist that he sell for dollars-either United States or Canadian dollars-that they take possession of the dollars, and give him sterling in exchange. That is the source of the funds used in repayment of this debt. The advantage of this type of redemption is that it does not affect the British trading position because we are not taking out of current import-export revenue but rather out of an accumulation of Canadian capital in Great Britain.


Victor Quelch: Can the parliamentary assistant tell us what is the total value of Canadian securities held in Britain to date?


James Sinclair: I thought that question
might be asked. I have the figures here, though I do not think the figures are very reliable. It is a long list.


Victor Quelch: Can the parliamentary assistant give the value of the Canadian railway securities?


Stanley Howard Knowles: What did the hon. member mean when he said that the figures are not reliable?


James Sinclair: As to value; there has been
such a great appreciation in value. For example, C.P.R. stocks in 1948 had a value much less than that of the same stocks in the same hands today. That is one of the problems. On page 181 of the publication entitled "Canadian Balance of International Payments" the figures are given, and of course it gives all the payments by Great Britain on federal securities of Canada; that is, Dominion of Canada bonds and C.N.R. bonds guaranteed by the Dominion of Canada. Since 1945 there have been no holdings. They have all been repatriated.


Victor Quelch: Has the parliamentary assistant a list of provincial bonds?


James Sinclair: I have not a list of provincial bonds, but I have the total. The last total given here was $37 million-that is in 1946-[DOT] and $78 million of municipal bonds. There are further figures here. Canadian assets abroad; that is just general assets abroad. That is the Canadian balance of international payments, 1950: direct investment, Canadian

investments held outside of Canada, $393 million. It is a difficult thing to get an accurate statement of these holdings today. The holdings in Britain are not in the hands of the government; they are still in the hands of individuals. It is only when sale or redemption comes, when the proceeds are held by the foreign exchange control board, that we have knowledge of it. The tables are much too long to put in Hansard but I will send them over to the hon. member.


Victor Quelch: What is the total amount of Canadian loans to Britain outstanding, in addition to these?


James Sinclair: Since 1939 we have the
$1,250 million credit which was given in 1946 and of which up to date $1,185 million has been taken up. That is, all but $65 million has been taken up on that. The amount in 1942 was an outright gift of $1 billion; then there was the mutual aid, which is after all part of our common war effort. Gifts or contributions-I guess that is a better word; it was not a gift, it was part of our common war effort-are listed in the final report of the Canada mutual aid board: 1943-44, to the United Kingdom, $722,821,000; 1944-45, $719,239,000;	1945-46,	$670,090,000; total
mutual aid to Britain of $2,112,150,000.


Victor Quelch: That is a grant.


James Sinclair: That is a grant; that is right. It should not even be called a grant. That was part of our common war effort. Britain was putting up plenty in other ways at the same time.


Mr. Brooks:: While the minister is dealing with that matter I want to ask about the $65 million paid to the western wheat growers. Did that amount come out of this loan to Great Britain?


James Sinclair: My recollection of the $65 million-I am not a wheat farmer-was that it was an item in our estimates-


Alfred Johnson Brooks: The wheat farmers know that.


James Sinclair: -paid out of the consolidated revenue fund; paid by the taxpayers of Canada.


An hon. Member:: Paid by the farmers
themselves.


Mr. Fair:: Will the parliamentary assistant tell us what the people of Canada got in exchange for that $65 million? That will run up close to $500 million, and it is continuing. That is for the period for which the $65 million was paid, and the thing is still continuing.


James Sinclair: I would prefer not to get into a discussion on the $65 million transaction, because it has nothing whatsoever to do with the 1942 United Kingdom loan.


Percy Ellis Wright: Is any of the money that is secured in Great Britain for repayment of these loans from sales of bonds or stocks of private corporations in Canada?


James Sinclair: Yes. Perhaps I did not make that point quite clear. The first $300 million in 1942 was the proceeds of sales of Dominion of Canada bonds and C.N.R. bonds held in Britain which had been drawn in by the United Kingdom government. Incidentally, in Great Britain they drew in all the national securities of other countries, because those are debts by those governments payable to their citizens. From that time on it has been the maturity, redemption or sale of any Canadian security which is payable in Canadian dollars, held by anyone. If, for example, you had a C.P.R. bond which became due and which was to be paid up, the foreign exchange control board in Great Britain would take the proceeds in dollars, they would give you the equivalent in sterling and those proceeds would be applied to the reduction of this long-term, non-interestbearing loan.


Percy Ellis Wright: The parliamentary assistant used as an example exactly the bonds which I was thinking of when I asked my question, namely C.P.R. holdings. It was my understanding that in the last few years-that is, in the last five or six years, since the war-* there have been large transfers to the United States of C.P.R. stock that was held in Great Britain. Just how does that take place without the proceeds being used to liquidate this debt?


James Sinclair: We of course were not the only country to make loans to Great Britain at the time. The United States also made a loan. Their loan was not interest-free. They asked for 5 per cent. Just for my own satisfaction I worked out the difference with regard to interest which would have accrued on our loan up to date if we had charged 5 per cent. There would be another $195 million. But of course we have charged no interest on this loan. The United States as well insisted that these securities be put up for collateral against their loan; that is, United States securities. There are quite a number of Canadian securities of the old days which were payable in United States funds, particularly the ones financed through New York, and these are the ones the United States have got in repayment of their loan; but the Canadian securities payable in Canadian funds are the ones which have been offset against this loan.
Whaling Convention


Percy Ellis Wright: The C.P.R. stock held in Great Britain would be payable in Canadian funds. Why was it not redeemed and placed against this loan? Why was it sold to the United States, if it were sold there?


James Sinclair: I am again just speaking from rather hazy memory. I do not believe that any Canadian C.P.R. stock or securities, whether floated in New York or otherwise, not having an obligation to pay in United States funds, was handled in that way. With regard to that stock, the British have been meticulous about placing maturities and redemptions of Canadian securities payable in Canadian funds against our loans of 1942.


[Stage Direction]
Section agreed to.
Title agreed to.
Bill reported, read the third time and passed.


Alphonse Fournier: the second reading of Bill No. 20, to implement the international convention for the regulation of whaling.


Mr. J. W. MacNaughl (Parliamentary Assistant to the Minister of Fisheries):: Mr. Speaker, before I deal with the principle contained in the bill I think I should give the house a brief outline of the history leading up to this measure.
For some time there has been much concern over the depletion of the whale population. Attempts were made from time to time to arrange an international agreement for the regulation of whaling. One of the first international conferences was held at Geneva in 1931 and resulted in what was termed the Geneva convention. Subsequent agreements were concluded from time to time at London; but as these agreements were of short duration there was no continuing method by which whaling operations throughout the world could be regulated. Consequently in 1946 a further conference was held in Washington. This resulted in the present international convention for the regulation of whaling. Eighteen countries were represented at this conference: Argentina, Australia, Brazil, Canada, Chile, Denmark, France, The Netherlands, New Zealand, Norway, Peru, U.S.S.R., the United Kingdom, the United States, Iceland, Portugal, Sweden, and the Union of South Africa.
The convention has been ratified by sixteen countries. It was ratified by the parliament of Canada by joint resolution of the

Whaling Convention
two houses in the session of 1948. A very interesting debate took place in the house at that time, which may be found at page 3798 of volume IV of Hansard of 1948. For the convenience of hon. members the convention is appended to this bill.
At the time of the ratification of the convention in 1948 whaling had dropped to a very low figure; and because of Canada's small interest in whaling it was not thought necessary at that time to pass any legislation to implement the terms of the convention. By way of illustration, whaling had dropped from a total of 1,198 whales killed in British Columbia in 1911 to 91 killed in 1943. At that time the Consolidated Whaling Corporation ceased operation and no whales were taken on the Pacific coast by Canada during the years 1944 to 1947, inclusive. In 1948 British Columbia Packers, Limited, commenced operations and from that time a flourishing whaling business has grown up from its land station at Coal Harbour on Vancouver island.
With the coming into confederation of Newfoundland in 1949 Canada acquired the responsibility of carrying out the terms of the convention in respect of the existing whaling industry in that province. Newfoundland has had a flourishing whaling industry for many years. There are now two land stations in Newfoundland, one at Williamsport and the other at Trinity Bay; there is also one at Hawkes Harbour, Labrador.
I should now like to put on the record some statistics in connection with the whaling industry of Canada. The number of whales caught on the Pacific coast in 1948 was 182; in 1949, 255; in 1950, 350, and the unrevised figures for 1951 are 437. The number of whales caught on the Atlantic coast in 1948 was 811; in 1949, 580; in 1950, 485; and for 1951 the unrevised figures are 579. The total marketed value of the products for 1948 was $2,546,370; for 1949, $1,462,183 and for 1950, $1,514,311.
The oil produced from whales is an important product and has many important uses, the chief of which are: for the making of soap, for leather tanning, for animal stock food, for poultry food and for hardening of steel. The meal produced from the meat is used chiefly for animal stock-feeding purposes. In the 1950-51 season the world production of whale oil amounted to 2,305,187 barrels as compared with 2,165,505 barrels in the previous year.

The international whaling commission bases its regulations on scientific information furnished by the member countries. It is considered that only by international agreement can the world stocks of whales be protected against depletion and the existing population maintained and increased.
Since Canada's interest in whaling operations has materially increased, it is thought desirable to enact statutory provisions to carry out the obligations assumed by Canada under the international commission for the regulation of whaling. It is for this purpose that the present bill has been introduced. As hon. members may have noted, it has already received the approval of the other house.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Beaudoin in the chair.
On section 1-Short title.
Stanley Howard Knowles: I should like to ask one or two questions of the parliamentary assistant.
I notice he gave figures as to the number of whales that had been caught on the Pacific coast and the Atlantic coast from 1948 to the present. However, he did not say anything about the situation in Hudson bay. Is the catch in that area included in the figures for the Atlantic coast, or is there something distinctive about the whales ini Hudson bay?


John Watson MacNaught: Mr. Chairman, I believe the hon. member is referring to the belugas which are caught in Hudson bay. At this time the regulations of the whaling commission do not extend to belugas, and for that reason they do not come within the statistics I furnished.


Stanley Howard Knowles: I am sure hon. members know the answer, but it might be well to have the information on record. Therefore I gladly give the parliamentary assistant a chance to explain the relationship between whales and belugas.


William Gilbert Weir: Ask the ' hon. member for
Dauphin.


John Watson MacNaught: It is a scientific explanation, and I am afraid any attempt I would make to give it would not be of much help. There is an argument, however, I believe to the effect that the beluga belongs to the porpoise rather than the whale family. Perhaps the hon. member for Dauphin would tell us.


Mr. Ward:: What the parliamentary assistant has said is correct. The beluga is not a whale, and does not come under the international whaling agreement. The differentiation is that the whale has two blow holes in his head whereas the porpoise or the beluga as

Canada Lands Surveys Act
we have called them in. Hudson bay has only one. And while I am on my feet I might add that the beluga we catch in Hudson bay weighs only from about 1,200 to 2,000 pounds. One readily sees the difference between that and the large ocean whale that weighs anywhere from 20 to 80 or 90 tons.


Stanley Howard Knowles: Are not the same products obtained from both these species? Perhaps I should first ask whether the beluga is an animal, because I understand the whale is a mammal, not a fish. To which family does the beluga belong?


William John Ward: As I said a moment ago, it belongs to the porpoise family. The oil from the beluga is of a much finer quality than is obtained from the larger species, and is used exclusively in the manufacture of domestic shortening, margarine and kindred products. There is a further difference in that we utilize every ounce of the anatomy. It is not dried, but is ground and sold to the fur industry. We also salvage a considerable quantity of a very fine quality of edible sirloin steak made from the animals we process. Then we get small quantities of a very fine lubricating oil known as jaw oil. I believe it is not obtained from any species other than the porpoise family. This oil is used in the oiling of precision machinery such as addressograph machines, cheque-writing machines, wrist watches and other fine precision machinery. We produce a small quantity of that quality of oil.


Stanley Howard Knowles: I note that the hon. member for Dauphin has indicated many more uses for the oil from belugas than were indicated by the parliamentary assistant for the oil from whales. I noticed in particular that the parliamentary assistant omitted any reference to the use of whale oil in the manufacture of margarine. Is it used for that purpose?


John Watson MacNaught: I understand that it is, but only in trifling quantities.


Mr. Herridge:: I was interested in the information given to the committee regarding these one-blow-hole belugas. Do they abound in such quantities that there is no necessity for their being protected by fishing regulations?


John Watson MacNaught: The scientific studies of the commission have not yet reached that stage.


[Stage Direction]
Section agreed to.
On section 2-Definitions.
Stanley Howard Knowles: I understand we are not now approving of the convention which appears as a schedule to the bill. That has already been done.


John Watson MacNaught: The convention has already been approved by a joint address of both houses. It was done in 1948.


[Stage Direction]
Section agreed to.
Sections 3 to 11 inclusive agreed to.
Bill reported.
Mr. Depuly Speaker:: When shall the bill be read a third time?


Some hon. Members:: Now.


Stanley Howard Knowles: By leave.
Mr. Fournier, Hull (for Mr. Mayhew) moved
the third reading of the bill.


[Stage Direction]
Motion agreed to, bill read the third time and passed.


Hon. George Prudham (Minister of Mines and Technical Surveys) moved: the second reading of Bill No. 14, respecting the surveys of public lands of Canada.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Beaudoin in the chair.
Section 1 agreed to.
On section 2-Definitions.
Herbert Wilfred Herridge: In paragraph (e) of subsection 1 of section 2 the term "dominion land surveyor" is used, and it says that it means a person who holds a commission. Is a person holding a dominion land surveyor's certificate entitled to perform services for private interests in the provinces? What are his functions?


George Prudham: A dominion land surveyor holds a certificate which entitles him to practise his profession in the Northwest Territories or any lands that are under the control of the federal government. He cannot register a transfer in a provincial registry office.


Stanley Howard Knowles: When we were at the resolution stage of this bill we had an interesting discussion concerning the proposal to change the title from Dominion Lands Surveys Act to Canada Lands Surveys Act. As a matter of fact I think it is a good change, but I note that in other places in the bill, particularly in this section, the word "dominion" still appears. Would the minister explain how it is that the government has decided to drop the term "dominion" in some instances and replace it with "Canada" and in other cases to leave the word "dominion"?

Canada Lands Surveys Act


George Prudham: Where the word "dominion" applied formerly to surveys of public lands in Canada it is now eliminated. It appears in the bill when it refers to the dominion land surveyors, who are a separate body of men with certain qualifications and a long tradition. There are some two or three hundred men qualified and licensed to practise as dominion land surveyors. Their status has no relation to the bill before us. If at any time that group should ask for a change of name the matter would then be considered, but we do not propose to interfere in any way with their name or their status by this bill.


[Stage Direction]
Section agreed to.
Sections 3 to 29 inclusive agreed to.
On section 30-Canadian measure of length.
Stanley Howard Knowles: I notice that the explanatory note says this section has been revised in order to adapt it to present-day conditions and modern surveying practices. This is the part of the bill headed "Standard of measure". Would the minister explain what kinds of changes or adaptations have been made?


George Prudham: The change there is that all tapes used must now be standardized by the national research council.


[Stage Direction]
Section agreed to.
On section 31-Meaning of "public lands".
Mr.   Baler@: This part of the bill refers to surveys of public lands in the Northwest Territories, Yukon Territory and national parks and of surrendered lands and reserves. I should like to ask the minister if the surveying that is going on in connection with these northern areas is being broken down into township sections and quarter sections?


George Prudham: Generally speaking that is the way it is being done.


[Stage Direction]
Section agreed to.
On section 32-When surveys undertaken.
Mr. Goode:: I notice that part of the administration of this act is in the hands of the Minister of Resources and Development and another part is in the hands of the Minister of Citizenship and Immigration. Is that not confusing? Would the minister give us an explanation?


George Prudham: Yes. With the reorganization of certain departments in 1950, the administration of public lands in the two territories and in the national parks was placed under the Minister of Resources and Development, and that of surrendered lands and reserves as defined in the Indian Act

under the Minister of Citizenship and Immigration, whereas the management of all surveys of these lands was placed under the Minister of Mines and Technical Surveys. Provision has been made in the bill whereby the Minister of Mines and Technical Surveys shall initiate surveys at the request of the minister responsible for the administration of lands under his control. I believe part IV, section 61, of the bill also covers certain lands which may be alienated or affected anywhere in Canada, lands that are under the control of the federal government.


[Stage Direction]
Section agreed to.
On section 33-Who may survey public lands in territories.
Mr. Shaw:: It is provided in subsection 2 of section 33 that where a survey to be made in a park or on an Indian reservation is likely to affect the rights of owners of adjoining lands, then a surveyor who holds a diploma within the province is utilized. Under what circumstances could a survey within a reserve or a park affect the owners of adjoining lands?


George Prudham: That would most likely be a boundary survey where private individuals own the adjoining land. There might be a dispute over a corner marker or other discrepancies. Provincial surveys can only be registered by a surveyor qualified to survey within the province. A dominion land surveyor cannot register a survey. Therefore this provision is put in the bill to avoid any arguments. If there is a boundary survey that might conflict with private owners, it is thought better to employ a provincial surveyor in order to avoid disputes.


Frederick Davis Shaw: Is it the private owner who must take the initiative in having this done? The minister said something about where a dispute is likely to occur. Does your department wait until there is a protest registered by a private owner, or is it automatic in every case?


George Prudham: I am informed there would have to be a protest or a request from the private owner.


Mr. McLure:: What is the difference between "dominion land surveyor" and "Canada land surveyor"?


George Prudham: There is no such person as a Canada land surveyor. There are dominion land surveyors, also surveyors designated by the provinces.


Winfield Chester Scott McLure: What is the difference between the Dominion Lands Surveys Act and the Canada Lands Surveys Act? If you are going

Canada Lands Surveys Act to have such a hatred for the word Mr. Prudham: The Northwest Territories "dominion" why not use "Canada" through- and the Yukon are under the jurisdiction of out? Why not say "Canada land surveyor" the Minister of Resources and Development, instead of "dominion land surveyor"? There The Department of Mines and Technical Sur-must be some reason.	veys carry out surveys at his request.


George Prudham: Probably the hon. member was not present a few moments ago. I gave that explanation earlier.


Alfred Johnson Brooks: I should like to ask the minister whether any of these lands are granted for settlement. I notice that surveys are made, and I should like to know whether there has been any settlement in the last few years, and if so to what extent?


George Prudham: This department does not have the management of lands. We institute these surveys at the request of the minister responsible. I think probably in the Northwest Territories that condition will exist.


[Stage Direction]
Section agreed to.
Sections 34 and 35 agreed to.
On section 36-Townships to contain thirty-six sections.
Stanley Howard Knowles: I should like to ask a question with regard to the diagram which forms part of subsection 2. I have lived long enough in western Canada that I should know the answer, but this question has often presented itself to me. Is the road allowance in addition to the mile which is the width of the section? In other words, is a township exactly six miles wide or is each section a little less than a mile wide?


George Prudham: The road allowance is in addition to the measured mile.


Stanley Howard Knowles: Then the township would actually be more than six miles wide?


George Prudham: That is right.


[Stage Direction]
Section agreed to.
On section 37-Allowance north and south error.
Herbert Wilfred Herridge: I should like to ask the minister the maximum error per mile allowed by the surveyor general in surveys of this type.


George Prudham: The surveyor general is looking that up.
Section stands.
Sections 38 to 47 inclusive agreed to.
On section 48-Definitions.


Mr. Catherwood:: This section refers to the Minister of Resources and Development, while section 50 refers to the Minister of Mines and Technical Surveys; why the difference?


Percy Ellis Wright: Are squatters' rights in the Northwest Territories recognized? Under the old Dominion Lands Surveys Act, which applied to the provinces before the natural resources were turned over, squatters' rights were recognized.


George Prudham: I think we will have to go to the Department of Resources and Development for that answer. There is provision for appeals, and I think the matter would probably be settled by that means.


[Stage Direction]
Section agreed to.
Section 49 agreed to.
On section 50-When undertaken.
Winfield Chester Scott McLure: This section refers to a dominion land surveyor, and there would appear to be no such thing as a Canada land surveyor.


George Prudham: I think the hon. gentleman will have to refer to Hansard for the complete explanation I gave earlier. There is no such person as a Canada land surveyor; he is known as a dominion land surveyor.


[Stage Direction]
Section agreed to.
Sections 51 to 59 inclusive agreed to.
On section 60-Registration of plans.
Herbert Wilfred Herridge: Can anyone secure a copy of field survey notes from the surveyor general in connection with any lands he may be
interested in?


George Prudham: Yes.


[Stage Direction]
Section agreed to.
On section 61-General power to survey.
George Prudham: I should like one of my colleagues to move an amendment as follows:
61. (1) Subject to this act, the minister may, if in his opinion a survey thereof under the management of the surveyor general is required, cause a survey to be made of any lands belonging to His Majesty in right of Canada or of which the government of Canada has power to dispose, but, where surveys of such lands affect or are likely to affect the rights of landowners of adjoining lands, the surveys shall be made by a surveyor who holds a valid and subsisting certificate, diploma, commission or other document entitling him to survey lands in the province in which such surveys are made.
(2) The provisions of this act relating to surveys shall apply, mutatis mutandis, to surveys made under subsection one.


Mr. Bradley:: I so move.

Toronto Harbour Commissioners Act


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Sections 62 to 66 inclusive agreed to.
On section 67-Penalty for defacing monuments.
Victor Quelch: I take it that among other things this section applies to the stakes that are set up. As time goes on many of these stakes are knocked over and the holes get filled up, and I should like to know if it is possible to have a resurvey on application.


George Prudham: It would be made on the request of the minister in charge of the lands.


Herbert Wilfred Herridge: Many of these monuments are destroyed from time to time, and I should like to know if the department has given any consideration to providing a permanent type of monument.


George Prudham: The request has been made to the national research council to devise a marker which will be more or less indestructible.


Victor Quelch: I think the idea is a good one. Many of these stakes are simply used as crowbars.


[Stage Direction]
Section agreed to.
Section 68 agreed to.
On section 37-Allowance north and south error.
George Prudham: Mr. Chairman, on the control meridian and the control chord, the margin of error permitted is 1 link per mile, and for enclosure around a section the error permitted is 3 minutes an angle and 5 links in distance.


[Stage Direction]
Section agreed to.
Title agreed to.
Bill reported.


Alphonse Fournier: that the house go into committee to consider Bill No. 9, to amend the Toronto Harbour Commissioners Act.
Motion agreed to and the house went into committee, Mr. Dion in the chair.
On section 1-Short title.


Mr. Green:: Is the parliamentary assistant going to make a statement?


Mr. Benidickson:: I might say that this bill comes back from the committee oh railways,

canals and telegraph lines with two slight amendments. Section 3 is amended in two respects. The first is in subclause (c), and is to the effect that the authority of the Toronto harbour commissioners under this section will be subject to the Pipe Lines Act. Then it is proposed to add a subclause 6 which establishes that nothing done by reason of this section shall affect the construction or maintenance of any railway under the jurisdiction of the parliament of Canada.


[Stage Direction]
Section agreed to.
Section 2 agreed to.
On section 3-Regulation etc., of works and businesses in harbour area.
Mr. Hees:: Mr. Chairman, section 3 provides for a maximum penalty of $1,000 for pollution of the water of the Toronto harbour. Two years ago oil was allowed to escape into Toronto bay, and this oil made it impossible for hundreds of thousands of Toronto residents to use the bay for bathing purposes during the greater portion of that summer. I do not think the maximum penalty of $1,000 is sufficient to ensure that oil companies will pay enough attention to safety measures so that oil will not escape into Toronto harbour in the future. I believe the maximum penalty should be increased to $10,000. Only an amount of that magnitude will impress upon the large oil companies the necessity of making sure that such failures do not occur again. I feel that the uninterrupted use of the water in Toronto bay is too important to the citizens of Toronto to take any chance on its being polluted due to the carelessness of oil companies. I should like to recommend to the government that they increase the maximum penalty to $10,000.
That would not mean that if oil escaped the company would have to pay $10,000 automatically. It would be brought into court, and if the company were found guilty of carelessness or negligence then a fine of $10,000 would not be too large. The hundreds of thousands of people who are not fortunate enough to get away to summer resorts are caused great inconvenience when they cannot use the bay for bathing, boating and so on. I should like to recommend that change in section 3.


Mr. MacDougall:: It also increases the fire hazard.


George Harris Hees: Yes, it does.


William Moore Benidickson: I am sure the Toronto harbour commissioners will give some consideration to that when they read the remarks of the hon. member for Broadview. I remind the hon. member that these amendments come

to us at the suggestion, of the commissioners. As he well knows, three of those members are appointed by the city council. The city council has studied this bill. The penalty contained in the bill is considerably stiffer than it has been hitherto. We might try this and probably we should not place in the hands of the court as stiff a penalty as that suggested at this time.


[Stage Direction]
Section agreed to.
Schedule agreed to.
Bill reported.
Mr. Fournier, Hull (for Mr. Chevrier) moved the third reading of the bill.
Motion agreed to and bill read the third time and passed.
Business of the House BUSINESS OF THE HOUSE
Alphonse Fournier: the adjourment of the house.
He said: Tomorrow we shall discuss the resolution in the name of the Minister of Veterans Affairs increasing the rate of pension for disability and death; then Bill No. 15, an act to provide for privileges and immunities in respect to the North Atlantic Treaty Organization; Bill No. 24, an act to amend the Public Printing and Stationery Act. If the select committee on railway legislation reports the railway bills, they will be called at the same time.
Motion agreed to and the house adjourned at 5.05 p.m.



END OF VOLUME I